Sorry for the delay in response, and sorry for the spykidz.
Again, WP was not exploited. The server was exploited through a weakenss in an install of PHPBB, by someone on a different domain (the joys of shared hosting).
I do not know what weakness they exploited, but I know the result, which is index files were over written with the irritating tag line. As a side note, I have several different installs of WP on one shared server (all installed at different domains). Only one theme in one install was affected, and it was only affected becuase I had the permissions set to 666, I was editing the file through the file editor, this is the only reason that we (my host admins and I) can find that allowed the index file to be overwritten.
The only steps that I needed to to fix the problem was to refresh my theme from a “unaffected” backup. And make sure that I reset permissions as soon as I am done working. I keep and make my own backups, so this was no problem. As an added precaution, and as a way to clean up the domain, I asked the Hosting Provider admin to delete all contents from the httpdocs, and I started the whole thing fresh.
The Database was not affected so it did not need any work.
